Oil declined for the first time in four days as a strengthening dollar curbed investor demand for raw materials and traders bet stockpiles in the US are rising.
Futures dropped as much as 0.6 per cent as the dollar climbed against all but one of its 16 most-traded peers. An Energy Department report today may show crude inventories increased by 1 million barrels last week, according to a Bloomberg News survey of analysts. The American Petroleum Institute said yesterday stockpiles surged 6.43 million barrels.
“Oil continues to react to dollar movements,” said Ben Westmore, a minerals and energy economist at National Australia Bank. “With seasonal maintenance and outages at refineries, I’d expect to see some build in crude stockpiles.”
The December contract fell as much as 47 cents to $US82.08 in electronic trading on the New York Mercantile Exchange, and was at $US82.10 at 11:18 a.m. Singapore time. Yesterday it added 3 cents to $US82.55. Futures are up 3.6 per cent this year.
The dollar advanced after the US Conference Board said yesterday consumer confidence climbed in October from a seven- month low. The greenback rose 0.3 per cent versus the euro and the yen.
The Energy Department report in Washington today may show gasoline stockpiles rose by 625,000 barrels last week, according to the Bloomberg News survey. The industry-funded API reported yesterday that supplies of the motor fuel slipped 1.81 million barrels.
Gasoline demand
US gasoline demand decreased 1.7 per cent last week, the largest week-to-week slide since Sept. 10, MasterCard said in its SpendingPulse report. Motorists bought an average 9.1 million barrels of the fuel a day in the week ended Oct. 22, the second-biggest payments network company said.
Inventories of distillate fuel, a category that includes heating oil and diesel, slid 1.5 million barrels, the Bloomberg News survey shows. They climbed 818,000 barrels according to yesterday’s API report.
“We need a series of draws, especially in distillates and crude, in order to see the market tightening,” National Australia Bank’s Westmore said by telephone today. “Given the size of distillate stocks at the moment, I’d expect refinery runs to continue being weak.”
Protests easing
Crude also dropped as protests by French oil industry workers against pension reforms eased. Industrial action across France forced nine of 11 refineries to shut, causing fuel shortages and disrupting exports to foreign markets.
A quarter of France’s refinery workers agreed to go back to work after the French Senate passed President Nicolas Sarkozy’s pension bill, paving the way for the minimum retirement age to increase to 62 from 60. The bill goes for a final vote at the National Assembly today.
Brent crude for December settlement was at $US83.25 a barrel, down 41 cents, on the London-based ICE Futures Europe exchange. The contract advanced 12 cents to $US83.66 yesterday.
Bloomberg
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